ML19326D136

Response to Mi Municipals & Cooperatives to Commission 770113 Order Re ALAB-452 Review.Certificate of Svc Encl. If ALAB-452 Reviewed,No Reason Seen for Staying Proceedings on Remand.Certificate of Svc Encl

ML19326D136
Person / Time
Site:	Midland
Issue date:	01/27/1978
From:	Jablon R NORTHERN MICHIGAN ELECTRIC COOPERATIVE, INC., SPIEGEL & MCDIARMID, WOLVERINE POWER SUPPLY COOPERATIVE, INC. (FORMERLY
To:
References
NUDOCS 8006060699
Download: ML19326D136 (4)

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In the Matter o:. 7 7 ',f 5 e;P c D/ u\/

a Consu=ers Power Company ) Docket Nos. 54-229A (Midland Plan:, Units 1 and 2 ) 50-330A RESPONSE OF MICHIGAN MUNICI?ALS AND COOPERATIVES TO THE COMMISSION'S JANUARY 13, 1977 ORDER I

1 The Co==ission has requested the views of the parties '

whether it should defer consideration of review of ALA3-452 "until l after the decision on re=and and the Appeal Board review of it."

Order, p. 2. ~his response is filed on behalf of the Cities of Coldwater, Grand Haven, Holland, Traverse City, and Zeeland, the  ;

Northern Michigan Electric Cooperative, Inc., the Volverine Electric I Cooperative, and the Michigan Municipal Electric Association ("Munis/ I Co-ops"). I l

Based upon a thorough review of the record, the Appeal Board found (ALAS-452, p. 420):

". . . Consumers Power Co=pany has =onopolized the relevant =arkets for coordination services, wholesale

, electric power and retail electric power in violation both of the let:er and the spirit of See:1on 2 of the Sher =an Act."

Munis/Co-ops are confident that if it decides to review the Appeal Board's decision, the Coc=1ssion will affir=. They have no objection to i==ediate review of ALAS-452, should the Co==ission desire to do so. However, they suggest that the Co ission =ay desire to defer review of ALA3-452 for the following reasons:

1. Classic reasons of judicial econo =y argue against review of non-final orders. Federal ?cwer Coc=ission v. Metrecolitan Edison,

' 304 U.S. 375 (1938). Such rules allow reviewing bocies :o decide specifically defined problems, thus allowing for focused decision-making.

Rescue Ar=v v. Municioal Cour:, 331 U.S. 549 (1947) . If the Com=1ssion were to now review the entire Appeal Board decision, the parties would likely be arguing abstra.:: legal questions w1:hout being able :o focus on the relationship of those ques: ions to the relief ordered. In tha:

sense, any " final" decision of :he CoMssion would be deprived of contex:.

2. Af ter relief is ordered, the parties may focus on aspec:s of the decision : hat influence or are affected by the relief ordered. A=ong the standards governing the relief to be ordered is the

_ Commission's obligation to cure situacions tha: =ay be found inconsistent

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with the antitrus: laws. Atomic Energy Act, Section 105(c), 42 U.S.C.

52135(c); 116 Cons. Rec. 34312, 34318, 39621, 39622 (1970). Depending upon the i= pac: of relief, specific findings could take en greater or lesser i=portance.

3. Settlement or resolution of so=e or all of the issues in light of the Appeal Board's decision is at least a (hoped for) possibility.

Before briefing there vere extensive settle =ent discussions, which unfor-tunately did not resul: in agree =ent. Since the 1970 A=end=ents to the Atomic Energy Act, virtually all nuclear antitrust cases have resulted in seccle=ent and agreed-upon license conditions.

4. The delays caused by interi= Commission review could be lengthy. Because this is the first fully litigated antitrust case the Appeal Board wrote a co=prehensive decision. It was aided by hundreds of pages of briefs. The decision took over 400 pages. In view of 1:s scope, if the Cc==1ssion were to review the decision in its entirety, review could take =enths. Moreover, since the Appeal Board found at least a half dozen categories of de=onstrated antitrust violations on the par: of Consu=ers Pcwer Co=pany, any of which would warrant the grant of relief,1/ unless the Co==1ssion were to reverse everv finding, relief is likely. Unless the Co==ission were itself :o deter =ine :he relief to be ordered, a re=and would be necessary. And unless thcre were a set:le=ent, new appeals would then be likely.

Munis/Co-ops do not deem it a necessary given that the Commission would desire to review ALA3-452. If there is to be Com=1ssion review, that review =ay be li=ited to specified issues.

In deter =ining areas for review, if any, it =ay be helpful to have a complete decision. Menis-Co-ops cannot deny that this case is i=portant. F.cwever, the Appeal Board's decision is so comprehensive and obviously so carefully researched and vritten that it deserves great weight. Few opinions are as thorough.

The question whether there will be Coc:=ission review will await Consu=ers ?cwer Co=pany's petition for review. Whether the Licensing Board should be ordered to delay action in light of the remand depends in large ceasure on the likelihood of affir:ance. Ulti=acely, Consumers ?cwer Company justifies its refusals to deal upon clai=s tha t ,

as a public utility, it is i=mune from serious application of the antitrust laws. Since this case began, the issue has been decided squarely in Otter Tail Power Co. v. United States, 410 U.S. 366 (1973), a case which is indistinguishable from the Consumers Feuer Cc=canv case. Moreover, If The Licensing Board was in substantial factual agree =ent wi:h =any of these findings, although it disagreed as to the applicable law. For exa=ple, the Licensing 3aord found that Consu=ers Power Co=pany's " conduct a=ounced to a general refusal :o wheel; a refusal to offer access to Midland; and an anticompeci:1ve sche =e to =onopoli:e the retail and wholesale power =arkets." L3?-75-39, 2 NRC 29, 99,101,104 (1975) .

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l other recent Supreme Court decisions have eliminated all possible arguments by Consumers Power Company with regard to the matters under consideration that it is i=mune from the full i= pact of the Federal antitrus t laws. E.g., Cainesville Utilities Deoartment v. Florida Power Co ro . , 402 U.S . 515 (19 71) ; Gulf States Utilities Co. v. FPC, 411 U.S.

747 (1973); Federal Power Co= mission v. Convav Corceration, 426 U.S. 271 (1976); Cantor v. Detroit Edison Co. , 428 U.S. 579 (1975) . In the most recent decision concerning the subject, Hecht v. Pro-Football, Inc. ,

U.S. (CADC No. 75-1819, December 20, 1977), the District of Columbia Circuit states:

"The essential facility doctrine, also called the

' bottle-neck principle,' states that 'where facilities cannot practically be duplicated by would-be competitors, those in possession of them must allow them to be shared on fair terms. It is illegal restraint of trade to fore-close the scarce facility." If In light of the above cases, there is virtually no likelihood of reversal.

Should the Commission decide to review ALAB-452 at the present time, Munis/Co-ops can see no reason for staying proceedings before the Licensing Board on remand.

Respectfully submitted,

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Robert A. Jablon Attorney for the Cities of Coldwater, Grand Haven, Holland, Traverse City and Zeeland, the Northern Michigan Electric Cooperative, Inc., Wolverine Electric Cooperative, and the Michigan Municipal Electric Association January 27, 1978 -

Law Offices of:

Spiegel & McDiarmid

,, 2600 Virginia Avenue, N.W.

Washington, D.C. 20037 202-333-4500 l

1/ Quoting A. D. Neale, "The Antitrust Laws of the United States" l (2nd Ed. 1970). The Court applied the " bottle-neck" monopoly theory to the lease of a football stadium.

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.3 VERIFICATION DISTRICT OF COLLM5IA, SS:

Robert A. Jablon, being first duly sworn, deposes and says that he is an attorney for the Cities of Coldwater, Grand Haven, Holland, Traverse City, and Zeeland, the Northern Michigan Electric Cooperative, Inc., the Wolverine Electric Cooperative and the Michigan Municipal Electric Association, and that as such, he has signed the foregoing RESPONSE OF MICHIGAN MUNICIPALS AND COOPERATIVES TO THE COMMISSION'S JANUARY 13, 1977 ORDER for and on behalf of said parties; that he has read said Response and is familiar with the contents thereof; and that the matters and things therein set forth are true and correct to the best of his knowledge, infor=ation and belief, dj / / / ,? ? .l Robert A. Jablon Subscribed and sworn to before ce this th day of January,1978.

'.. Q' E . p.

Notary Public

'>-ms r.r;ees s ;t==ler 03.7.r" CERTIFICATE OF SERVICE I hereby certify that I have this day caused the foregoing document to be served upon each person designated on the official service list compiled by the Secretary in this proceeding in accordance with the

,. requirements of $1.17 of the Rules of Practice and Procedure.

Dated at Washington, D.C. this 27th day of January,1978.

,Gb. .W N ! . .

l Robert A. Jab-lon

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